In the above video, USDJPY starts US trading days with a -0.78% drop. After hitting a high of 148.02 last Monday, it’s fallen over 500 pips, reaching a low of 142.78, which mirrors a similar drop from June 13th. This decline echoes the patterns observed in the last week.
Meanwhile, both EUR and GBP are performing better than the US dollar, with declines of -0.26% and -0.22% respectively.
The video shares insights on technology, particularly movements that regard biases, risks, and targets.
On a different note, it seems that the “Big Beautiful Bill” is still being worked on, as indicated by the President.
Recent news highlights that inflation in the eurozone has risen to +2.0% year-on-year in June, slightly up from +1.9% in May. The core CPI has remained stable at +2.4%. With inflation stagnant, it’s likely that these figures won’t alter the prevailing narrative. The ECB is expected to hold its monetary policy steady until summer.
Today at 9:30 AM ET, a notable policy panel will take place during the European Central Bank’s annual Sintra Forum with prominent global central bankers. Featuring key figures like Federal Reserve Chair Jerome Powell and ECB President Christine Lagarde, their discussion is anticipated to shed light on global monetary policy trends. It may seem exciting on the surface, yet likely remains somewhat predictable, with Powell expected to maintain a tight-lipped stance on pressing queries.
In other updates from overnight central bank commentary:
- A major point was made that there are no significant disagreements on the fact that inflation remains below the 2% target, highlighting the importance of monitoring price changes after recent spikes, especially concerning rice. It was noted that present conditions don’t warrant immediate rate hikes and should be approached with caution. A stable environment was discussed, where corporate profits have seen boosts but have also resulted in negative impacts on consumer spending due to rising import costs. There was an admission that the BOJ must eventually rethink its substantial ETF holdings, yet this should be done carefully. When queried about his stance, he remarked on being “perhaps neutral.”
- ECB Vice President Louis De Gindes indicated the eurozone economy might hover around zero growth for the next quarters, suggesting minimal risk of falling below the 2% inflation target. Specifically, he mentioned that an exchange rate of 1.17 for Eurusd is acceptable, with 1.20 also manageable, but anything beyond that could present complications. Soft limits on currency appreciation seem agreed upon, implying further interest rate cuts might not be impactful and stressing the need for more economic stability.
- ECB policymaker Joachim Nagel noted that monetary policy is currently neutral and inflation is stable. However, he cautioned that the ECB shouldn’t be complacent about potential inflation risks. His comments support the idea that the ECB is in a holding pattern with no immediate policy shifts expected.
- BOE Governor Bailey stressed the importance of monitoring the impacts of falling inflation, noting that the labor market appears to be weakening. He mentioned that interest rates are on a gradual decline and raised questions about productivity in cyclical recovery. Additionally, Bailey observed that the long-term bond yield curve is steepening but noted there’s nothing particularly unusual in the UK’s situation. He rejected the notion that quantitative tightening is the cause of the steep slope, attributing it instead to growing global economic uncertainty. He pointed out that stable low inflation is crucial for sustainable growth, as the rising uncertainty is delaying investment decisions.
Earlier, Hassett hinted that any developments would likely follow after July 4th, although there are signs of an imminent deal with India.
- The EU is reportedly pursuing immediate tariff reductions in key sectors as part of a trade agreement with the US, ensuring these cuts take effect promptly after reaching an initial deal. Several EU members stress that these concessions are essential, based on sources from Reuters. Trump’s responses may vary based on the deal’s specifics.
- Additionally, reports suggest that the Trump administration is shifting towards more targeted trade strategies, aiming for narrower, issue-specific agreements for quick wins, to avert the sharp tariffs reintroduced on July 9th. These strategies might involve cooperative countries receiving delays in stricter tariffs, while a baseline tariff of 10% will still apply during ongoing negotiations. This approach appears to be a step back from earlier comprehensive plans.
The broader US index reached new highs yesterday but today shows a slight dip.
- Dow Jones Industrial Average – 48,177 points
- S&P Index – 17.7 points
- NASDAQ Index – 80 points
In the US debt market, yield shifts are influencing the dollar’s downward trend.
- 2-year yield: 3.715%, -0.6 basis points
- 5-year yield: 3.71%, -1.2 basis points
- 10-year yield: 4.206%, -1.9 basis points
- 30-year yield: 4.748%, -2.6 basis points
Other market updates:
- Crude oil up $0.43 or 0.66%, now at $65.04
- Gold increased by $48 or 1.4%, sitting at $3,352
- Bitcoin dipped by $606, now valued at $106,573
